Australian farmers will break records this year as the value and volume of their food and fibre climbs to historic highs, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).
- The ABARES analysis shows prices for nearly all food and fibre commodities are rising
- Poor conditions for international competitors are driving the increases
- La Niña is expected to set farmers up for another good year in 2022
With the price of grain climbing and unprecedented prices being paid at livestock sales all year, ABARES analysts have raised their forecast for total farm production to $78 billion this financial year.
Exports are also tipped to hit a record-breaking $61 billion.
The increased value of production is being driven in large part by the poor seasonal conditions experienced by competitors like Canada, Russia, Ukraine, Brazil, Argentina, and the United States.
Those conditions have dented the supply of wheat, barley and canola, driving prices up.
The substantial volumes of production have not been badly affected by the recent heavy rain and floods in New South Wales and Queensland.
The main impact of the wet weather will be to downgrade the quality of the crop, from human to animal-grade feed.
The La Niña conditions on the east coast will set farmers up for another good year in 2022, filling the soil with moisture, keeping irrigation water costs low and ensuring there is plenty of feed growing for livestock.
But farmers will face higher prices to grow their crops with prices for fuel, fertiliser, and farm chemicals all rising.
Despite this, ABARES tips farm cash income to hit a record $30.6 billion, off the back of the larger volumes of food and fibre produced in 2021-2022.
In a separate analysis, Rabobank predicts the rising cost of key farming inputs will constrain production next year.
The specialist food and agribusiness bank warned this would add to the inflation of food prices and could lead to social unrest.